The 2024 gift tax exclusion and estate tax exemption, in plain numbers
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Two different limits, one connected system: the amount you can give away each year without any paperwork, and the much larger amount that shields an estate from federal tax entirely.
In 2024 you can give up to $18,000 to any number of people — a child, a friend, a stranger — with no gift tax return required and no effect on your lifetime exemption. Give more than that to one person in a year, and nothing is owed immediately either: the excess simply counts against a much larger number, the $13,610,000 federal estate and gift tax exemption each person gets over a lifetime.
The annual exclusion: per recipient, per year, no return needed
The annual gift tax exclusion lets you give up to a set amount to as many different people as you want each year, completely free of gift tax and without filing anything with the IRS. It resets every calendar year and applies per recipient, not per giver's total giving — give $18,000 each to ten different people in 2024 and none of it touches your lifetime exemption or requires a return.
| Years | Annual exclusion per recipient |
|---|---|
| 2018–2021 | $15,000 |
| 2022 | $16,000 |
| 2023 | $17,000 |
| 2024 | $18,000 |
A married couple can elect "gift splitting" to treat a gift as coming half from each spouse, doubling the effective exclusion to $36,000 per recipient in 2024 — useful for a single large gift, such as a down payment, that would otherwise exceed one person's exclusion. These figures come from the IRS's 2024 tax inflation adjustments announcement and the annual exclusion history published in the Instructions for Form 706.
Some gifts do not use the exclusion at all
A handful of transfers fall outside the gift tax system entirely, with no dollar limit: tuition paid directly to an educational institution, and medical expenses paid directly to the provider — as long as the payment goes straight to the school or the hospital rather than to the person you are helping. Gifts to a spouse who is a U.S. citizen are also unlimited, and gifts to qualifying charities are deductible rather than taxable. The IRS's frequently asked questions on gift taxes confirm the educational and medical payment exclusions specifically.
The lifetime exemption: one number covering gifts and estates together
The $18,000 annual exclusion is not the only shelter. Behind it sits a much larger, unified exemption — $13,610,000 per person for 2024, up from $12,920,000 in 2023 — that covers gifts above the annual exclusion made during your life and whatever is left of your estate when you die, added together as one running total. Spending it during life through large gifts leaves less of it available at death, and vice versa; it is the same $13,610,000 either way, not two separate allowances. A surviving spouse can also inherit whatever portion of a deceased spouse's exemption went unused, through an election called portability — which is how a married couple can, between them, shield $27,220,000 from federal gift and estate tax.
What happens when a gift exceeds the annual exclusion
Take a parent who gives a child $50,000 in 2024 toward a home down payment.
| Scenario | Covered by annual exclusion | Reduces lifetime exemption by |
|---|---|---|
| One parent gives $50,000 | $18,000 | $32,000 |
| Both parents gift-split the $50,000 ($25,000 each) | $18,000 each | $7,000 each ($14,000 total) |
In either case, no gift tax is actually paid in 2024. The excess over the annual exclusion is reported on a gift tax return, Form 709, and simply reduces the amount of lifetime exemption still available — from $13,610,000 down to $13,578,000 for the single-parent scenario. Real gift tax is only owed once cumulative lifetime gifts, plus the eventual taxable estate, exceed the full $13,610,000 — a level the overwhelming majority of taxpayers never reach.
The same exemption, applied at death
An estate only has to file a federal estate tax return at all if the gross estate, plus any taxable gifts made during life, exceeds $13,610,000 for a person who died in 2024. Below that line, nothing is owed and nothing needs to be filed for estate tax purposes. Above it, the taxable amount is taxed at a top rate of 40% — the same top rate that has applied since 2013. An estate of $15,000,000 in 2024, for example, has $1,390,000 above the $13,610,000 exemption, taxed at 40% for roughly $556,000 in federal estate tax. The exemption amount and the 40% top rate, along with the $5,389,800 credit that produces this result mathematically, are set out in the 2024 Instructions for Form 706.
This exemption level is not permanent
The current, historically high exemption was doubled by the 2017 Tax Cuts and Jobs Act, and as of 2024 that provision is scheduled to expire after 2025 — reverting to roughly half its current level starting with gifts made and deaths occurring in 2026, unless Congress acts before then. The IRS has already confirmed that large gifts made under the higher exemption now will not be retroactively penalized if the exemption falls later, so there is no "clawback" risk in using the current amount while it lasts; see the IRS's own announcement on this point. Anyone doing estate planning around the current $13,610,000 figure should treat it as a window that is legislated to close, not a permanent baseline.
What to confirm before relying on these numbers
- Check whether your state also charges its own estate or inheritance tax — many states set a far lower threshold than the federal $13,610,000 exemption, with no equivalent to the federal exclusion.
- If a gift exceeds $18,000 to one recipient in 2024, a Form 709 gift tax return is required even though no tax is likely owed — filing and owing tax are two different questions.
- Confirm whether portability was elected on a deceased spouse's estate tax return; it is not automatic and has to be claimed even when no tax is otherwise due.
Sources
- IRS: IRS provides tax inflation adjustments for tax year 2024
- IRS: Instructions for Form 706 (Rev. October 2024), United States Estate (and Generation-Skipping Transfer) Tax Return
- IRS: Frequently asked questions on gift taxes
- IRS: Treasury, IRS: Making large gifts now won't harm estates after 2025
This is general information, not tax or legal advice. Gift and estate planning depends heavily on individual circumstances, state law, and timing. For a decision about a specific gift, an estate plan, or a return, consult a licensed estate attorney or tax professional, or the IRS directly.